Retail Finance Transformation: Unlocking Efficient Growth
Overview
Retail industries have faced numerous disruptions in recent years, driven by volatile market conditions, rising input costs, supply chain challenges, and shifting consumer behaviors. Despite these pressures, companies that embrace comprehensive business transformations and enhance agility have managed to maintain profitability and uncover new growth opportunities.
Key Findings
- Transformation Initiatives: 68% of retail executives are pursuing enterprise-wide transformations, with organizations typically undertaking 3 or more transformations.
- Acceleration of Transformations: 89% believe transformations are accelerating, primarily driven by the need to improve profitability and financial performance.
- Technology Adoption: 76% aim to use technology to address labor shortages, while 21% have seen profitability gains of 11% or more from investments in data and analytics.
Strategic Priorities
Retailers are focusing on:
- Enhancing service levels to drive customer loyalty.
- Embracing core business system transformations and leveraging AI to increase agility.
- Early involvement of finance in customer-centric strategies to ensure products and services are available in the right channels and at the right time.
Impact on Finance
- Visibility and Efficiency: Finance must enhance visibility between front- and back-office operations and invest in powerful digital capabilities to drive cost efficiencies.
- Data Utilization: Real-time strategic use of data is crucial, given the changing retail landscape.
- Legacy System Disruption: Retail finance organizations are burdened by legacy systems that hinder reforecasting and decision-making. There is a need to transform these systems to support shifting consumer habits and new digital initiatives.
Challenges
- Manual Processes: Manual accounting and planning processes lead to cumbersome close cycles, delayed reporting, and unreliable forecasts.
- Siloed Data: Siloed data from various sources prevents timely, data-driven insights and hinders the delivery of a seamless connected commerce experience.
- Rapid ROI: Retail CFOs seek immediate ROI and prefer deploying best-in-class enterprise cloud applications for faster implementation and lower costs.
Solutions
- Scalable Financial Systems: Investing in scalable financial systems with embedded AI and advanced analytics can help manage tight margins, drive efficiencies, and increase profitability.
- Best-in-Class Enterprise Cloud Strategy: Implementing best-in-class enterprise cloud applications can integrate and interact with legacy systems, allowing for efficient transformation without disrupting critical processes.
Conclusion
Retail finance organizations face significant challenges due to market volatility and changing consumer behaviors. However, by embracing comprehensive transformations, leveraging advanced technologies, and enhancing data utilization, retailers can achieve greater efficiency and profitability. The urgency for rapid ROI and the need for seamless integration highlight the importance of adopting best-in-class enterprise cloud solutions to stay competitive.
